066 – What can traders learn from Sully?

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Hi, I’d just like to start by saying Happy New Year!

I hope you’ve had a great holiday season and I wish you all the best for 2017!

You may be wondering what this episode is about, since it’s outside of my usual podcast schedule so let me explain.

Get to the point already!

A couple of weeks ago I was reading a blog post that seemed to go on forever, and I found myself saying “just get to the point already”.

I’m sure we’ve all been in that situation before.

Sometimes you just want a short bit of information so you can get on with your life.

2 days ago I was out doing some exercise on my bike and I was actually thinking about that blog post and came up with an idea… or it’s more like an experiment…

.. to start a new segment which I have given the slightly awkward and completely unimaginative name “Thursdays Trading Thoughts”.

What is “Thursdays Trading Thoughts?”

Well you can probably guess by the obvious name, but it’s going to be a very short weekly podcast episode I’ll release every Thursday, in addition to the full podcast episode I release every 2 weeks.

The idea is to make it very short, around five minutes in length, where I’ll share a trading thought or idea, either from myself or a special guest and we’ll just have a quick chat about a trading tip or insight, answer a question or something like that.

Just a small chunk of bite-sized information, sort of like a little “trading snack”.

As I mentioned, this is an experiment, I’ll give it a try for the next eight weeks and see if it’s any good.

If it’s a crap idea, then I’ll stop.

If it’s not then I’ll consider continuing on with it, so if you have any questions or ideas for this segment then please email me, let me know what you think.

Also, if you have a better name for this segment, which probably isn’t going to be very hard to come up with, let me know, because “Thursday Trading Thoughts” doesn’t exactly roll off the tongue nicely, does it!

If you submit a name for this segment and I use it, you’ll get a prize, how about that?

Anyway, this is going to be the first “Thursday Trading Thought” for the year and today I’m going to share with you something we can learn from a famous airline pilot.

One of the things I enjoy about the holiday season is that I get to catch up on movies and a movie that I noticed on Apple TV just the other day was a movie called “Sully”, which is the story of Captain Sullenberger, or Captain “Sully” as he is often referred to.

Who is Sully?

For those of you who don’t know who Captain Sully is, he was an airline pilot who was flying out of LaGuardia airport in New York, this was a few years ago, when his plane flew through a flock of birds and he lost power to both engines, which was unfortunate.

What made the situation even trickier was that he didn’t have enough speed or altitude to make it back to any of the closest airports to land, so he decided to attempt a water landing in the Hudson River instead.

Incredibly, he managed to land the plane and everyone survived.

He did what?

Anyway, as I was watching the movie I was reminded me of a reference to Capt Sully in one of the previous podcast episodes, so once the movie finished I looked it up and I found it in episode 27 with Dr Gary Dayton, where he makes a reference to the emotional response Captain Sully experienced during the ordeal and how this can apply to traders.

Let’s have a quick listen to what Gary had to say:

Andrew: Yeah, I think you had an excellent example in your book about the US Airways flight that hit a flock of birds and was forced to land in the Hudson.

Gary: Uh-huh.

Andrew: Can you share the lessons from the captain’s response to that incident?

Gary: Sure. It was big news a few years ago when he took off like LaGuardia Airport in New York and flew over the city and managed to hit a flock of geese. They got into the jets and stopped the engines from running. He knew it immediately and he tried to assess his situation.

There were local airports in New Jersey and also in New York, but he was at such an altitude and such a speed that he knew immediately that he wasn’t able to bring the plane to one of those alternate emergency landing spots.

His only choice was to put it into the Hudson River.

Now this was March and the river was choppy.

It goes into the ocean into Long Island Sound.

It was interesting because there was a Good Morning America interview of him a week or two after this event and Katie Couric, who was interviewing him, asked a really interesting question, some insightful question.

She said, “Well, Captain Sullenberger, were you concerned about the passengers? Were you thinking about praying for them?”

He said, “Well, no. there were people there. The crew was there to deal with the passengers and I figured the passengers themselves were praying. What my job,” he said, “was that to level the wings, get the nose at the right altitude, bring my airspeed down, not too low but not too high, and try to gently bring this plane into the river.”

He said something that was really telling. He said, “The physiological response I had to this was enormous,” meaning that he was scared and that he felt it in his body.

When we become frightened, three things happen.

Our minds get focused in on the threat.

Our emotions swell up within us, that fear, that trepidation, that apprehension, and all the way to abject terror, and our body response as part of the fight-or-flight syndrome is we start to get muscle tension.

We start to get sweaty palms, clammy palms.

Our stomach might churn.

We get dry mouth.

It feels very uncomfortable and he noted those, and he noted those.

Captain Sullenberger noted those.

I mean think about it in a plane and he had 135 passengers and crew on board, you’re holding their life in your hands and you’ve never done this before.

He had trained for it but he had never done it before.

He was scared.

He said it took all of his focus, all of his effort to keep focused on the right things – the levelling of the wings, the altitude, the nose, all of those things that a pilot does and that he successfully landed it. But he was scared, totally scared, but did it anyway and that was the point.

He didn’t try to suppress his fear.

If he did that, he would have his attention off of what was important, and what was important at that time was to land that aircraft with all the technical thing he had to do to accomplish the goal.

Focusing on the fear would have been the wrong [distortion 0:15:08] that we all do to bring into trading is kind of what traders do: we focus on the fear.

We try to suppress it.

We try to get rid of it, and therein lies the rub.

We get distracted off of our trade.

Our focus goes internal to our bodies, sensations, emotions that we feel, and it causes us to cut trade short or not pull the trigger, or ironically hang on to a losing trade until it becomes so painful that we have to take the loss. But we get distracted from good trading and ironically what happens is that we repeat this pattern over and over and over again.

Not only is it unworkable but it causes traders to really never learn how to manage themselves and manage their trades properly. And so they get caught in this vicious cycle where they have the fear response, their attention goes inside, they try to deal with it, and they never really learn how to trade well and that’s unfortunate but that’s what happens to the majority of traders that I work with anyway.”

What can traders learn from Sully?

So I think Gary has raised a couple of important points here that we may want to consider.

One that really stood out to me was the importance of focus, and controlling what we focus on. Capt Sully felt the fear understandably but he didn’t try to suppress it because that would have taken focus, rather he put all of his effort into focusing on the important tasks that were critical in producing a positive outcome.

Now we may never be in a situation where people’s lives depend on our actions, but being mindful of our focus, or where our focus is, can be critically important to the outcome, whether it’s in trading or any other endeavor.

I also found a number of other insights from watching the movie however I don’t really want to spoil the storyline for those that haven’t seen it yet so if that’s you, I do recommend you go and check it out.

Have you seen the movie?

If you have seen it, what insights or lessons did you get from watching it? I’m interested to hear your thoughts so leave a comment at the bottom of the page in the comments section.

Anyway that’s it for this very first “Thursdays Trading Thought”, I hope you found something of value in this short episode and I’ll catch you in just a few days time for the next episode of Better System Trader.

Bye for now,
Andrew

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